Wokai
| Company type | Non-profit organization |
|---|---|
| Industry | Microcredit |
| Founded | Fall 2006 |
| Headquarters | Beijing, China |
Key people | |
| Website | www.wokai.org |
Wokai is a capital-contributing microfinance intermediary in the China microfinance field. Wokai is specifically committed to raising loan capital for microfinance institutions (MFIs) in China. Via the internet, Wokai reaches out to individual contributors, a funding source generally inaccessible on the large scale to non-profit organizations operating in China. This approach allows Wokai to provide new capital resources to the microfinance sector, thereby expanding financial opportunities for the poor in China.[1] Currently in the developmental phase, Wokai plans to have its website fully functional by Fall 2008.[citation needed]
How it works
Wokai partners with local MFIs which identify and screen potential microentrepreneur clients. Selected clients are then posted on the Wokai website through profiles that outline their business ventures and loan request. Contributors browse these profiles, select who and how much to finance, and then transfer money to Wokai through our online payment system. Once funds are transferred, Wokai distributes this loan capital to partner MFIs for allocation to microentrepreneurs. At the end of the loan cycle, partner MFIs collect loan repayments and re-issue loans.[2]
How It Started
Wokai began in the fall of 2006 when Wokai co-founders Courtney McColgan and Casey Wilson met while studying advanced Chinese at Tsinghua University. Casey had moved to China to pursue a career in development. Courtney was on a Fulbright Scholarship to study microfinance in China after being involved in the field for the prior three years, working with the United Nations Development Program (UNDP), The Chinese Academy of Social Sciences (CASS), and Planet Finance. Casey and Courtney decided to combine their experience, local knowledge and common goal of bringing new economic opportunities to the poor in China. The idea of Wokai gradually transformed into a plan of action and, with the help of a team of supporters, evolved into a dynamic start-up nonprofit.[3]
Poverty in China
China currently has 300,000,000 people living below the poverty line according to world Bank 2008.[4] The majority of these individuals reside in remote regions that lack the basic infrastructure and human resources necessary for development. Government poverty alleviation programs have had increasing difficulty in serving these clients due to the high overhead costs of delivering financial services to remote areas. [5] Formal financial institutions have also offered little assistance, as they are unwilling to offer small-scale financial services to clients without collateral. The Rural Credit Cooperatives (RCCs), the dominant rural finance institution in China with nearly 38,000 branches nationwide, have provided the most hope for china's poor populations. Nevertheless, the Central Bank reports that, at present, RCCs only satisfy around 25% of rural credit demand. [6] The World Bank also reports that China's income inequality has risen from 28 percent in 1981 to 41 percent today, as measured by the Gini index.[7] China currently has one of the highest income inequalities of all lower-to-middle-income countries worldwide.[8]
References
- ^ "About" on Wokai.org
- ^ "About" on Wokai.org
- ^ "About" on Wokai.org
- ^ http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/EASTASIAPACIFICEXT/CHINAEXTN/0,,contentMDK:20680895~menuPK:318976~pagePK:1497618~piPK:217854~theSitePK:318950,00.html World Bank, China: Facts and Figures
- ^ Zuo Xiaolei,Is RCC Microfinance Model Sustainable and Replicable? Development International Dejardines Publication November 17, 2004.
- ^ Du Xiaoshan, Development and Policies of Microfinance in China, Beijing, China: Development Institute of Chinese Academy of Social Sciences, 2006
- ^ The Gini index provides a measure of inequality in a country wealth distribution. It contrasts actual income and property distribution with perfectly equal distribution. The value of the coefficient, or index, can vary from 0 (complete equality) to 1 (complete inequality)
- ^ Kaoru Nabeshima and Shahid Yusuf,China's Development Priorities, World Bank Publication 36215 (Washington), 2006